IEEE Network - March / April 2017 - page 40

IEEE Network • March/April 2017
0890-8044/17/$25.00 © 2017 IEEE
V2G systems bring many benefits to power
systems in stabilizing energy demand and sup-
ply fluctuations as well as to PEV users in reduc-
ing energy costs. To achieve the maximum
efficiency of V2G systems, data communication
plays an important role. However, it is subject
to cyber attack and failure, which hinder the
effectiveness of V2G systems. In this article, we
introduce a novel concept of using cyber insur-
ance to “transfer” cyber risk from a user to a
third party in PEV charging. We first introduce
V2G systems and briefly discuss the cyber risks.
Additionally, the basic concepts of cyber insur-
ance are presented. We then introduce the use
of cyber insurance to remove the risk of paying
high energy costs of PEV charging due to the
unavailability of data communication. We show
that the PEV user can achieve the maximum
benefit in deciding to charge its PEV and to buy
One challenge of the current power grid is to
provide sufficient capacity and cost-effective
energy storage. Energy storage is used as a tool
by the power grid operator to efficiently man-
age the generation and transmission of electricity
(i.e., supply and delivery) to meet dynamic and
unpredictable consumer demand. A traditional
approach is to deploy large generators, which
can be relatively ineffective due to long delay
response (minutes) and can cause underutiliza-
tion (spare capacity). In smart grid, ancillary ser-
vices such as load regulation, spinning reserve,
non-spinning reserve, and replacement reserve
to support the continuous flow of electricity have
been used to alleviate this problem. However,
the introduction of renewable sources, the ener-
gy supply of which depends on natural condi-
tions, aggravates the problem due to fluctuating
and unpredictable characteristics. Alternatively,
vehicle-to-grid (V2G) systems have been consid-
ered as a promising solution. Battery vehicles or
plug-in electric vehicles (PEVs) can be used as
energy storage devices. Although their battery
capacity is limited, they are suitable for short-
time ancillary services given their low response
time as well as lower standby and capital costs.
The effectiveness of V2G systems depends on
the number of PEVs participating and how good
the data exchange is between the V2G opera-
tor and PEVs to optimize system operations. For
example, the V2G operator can economically
manage its generators if the amount of energy
reserved from V2G systems can be accurately
estimated. Likewise, the PEV users can choose to
charge and discharge their battery to maximize
performance and minimize cost.
V2G data communication is an integral part
of V2G systems. However, due to its impor-
tance, V2G communication is vulnerable to cyber
attacks, which can violate confidentiality, authen-
ticity, integrity, and availability requirements of
the data exchange in V2G systems. A number of
cyber risks have emerged in V2G systems. The
majority of research works focus on mitigating
the risks by protecting the systems and preventing
adverse effects from the attacks. However, it is
well known that no single solution can completely
avoid the risks and their damage. An alternative
approach is to “transfer” the risks to a third party.
This is the concept of insurance, which has been
effectively adopted in many areas. Recently, it has
been introduced for computer systems, known
as “cyber insurance,” which is becoming more
accepted in broad fields of study and practice
related to information technology (IT) [1]. The
same concept applies to the risks from cyber
attacks, which can be transferred to the insurer
involving the insurance contract, premium, claim,
and indemnity concepts.
In this article, we introduce a novel concept of
cyber insurance for V2G systems. We first intro-
duce an overview of V2G systems, its data com-
munication, and cyber risks. We also review a few
seminal works related to V2G system security.
We then discuss the basics of cyber insurance.
Its applications in a variety of computer and com-
munication systems are reviewed. Additionally,
we propose cyber insurance for PEV charging. A
PEV user uses energy price information from V2G
communication to make a decision to charge the
battery or not. However, the data communication
can be unavailable due to an attack or system
failure. Therefore, an insurer can offer an insur-
ance policy to guarantee a low energy price if
the PEV user decides to charge the battery of its
PEV. Accordingly, the PEV user faces a decision
making problem of when to buy insurance and
when to charge the battery. The objective is to
minimize the total cost for energy charging, insur-
ance premium, and inefficiency due to lacking
the information to make an optimal decision and
not being covered by the insurance. As such, we
formulate an optimization problem to obtain an
optimal policy for the user to decide whether to
charge and whether to buy insurance or not. The
numerical results reveal effectiveness of the opti-
mization and some insight on user’s prior knowl-
edge on the risk.
Cyber Insurance for Plug-In Electric Vehicle Charging in Vehicle-to-Grid Systems
Dusit Niyato, Dinh Thai Hoang, Ping Wang, and Zhu Han
Dusit Niyato, Dinh Thai
Hoang, and Ping Wang are
with Nanyang Technological
Zhu Han is with the
University of Houston.
Digital Object Identifier:
1...,30,31,32,33,34,35,36,37,38,39 41,42,43,44,45,46,47,48,49,50,...100
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